1
FINA 3315 UTA Exam 1 -Complete
Practice Questions And Answers
When using the constant growth dividend valuation model, which of the following
will lower the value of the stock? - correct-answer -an increase in the required
rate of return
If the actual rate of return on an investment portfolio is constant from year to
year, the standard deviation of that portfolio is zero. - correct-answer -True
Betas for actively traded stocks. are readily available from online sources. -
correct-answer -True
For which one of the following situations will the dividend growth models work
especially well? - correct-answer -mature firm with a policy of increasing its
earnings and dividends at an average rate of 5% per year
, 2
Both the holding period to qualify and the tax rate on long term capital gains -
correct-answer -are subject to political pressure and occasionally change.
The stock of Plomb Co. falls sharply on news that its CEO has drowned in a boating
accident while on vacation. This is an example of - correct-answer -event risk
The returns on the stock of DEF and GHI companies over a 4 year period are
shown below:
Year DEF GHI
1 8% 11%
2 12% 9%
3 −5%− 9%
4 6% 13%
From this limited data you should conclude that returns on - correct-answer -DEF
and GHI are somewhat positively correlated.
Which one of the following statements is correct concerning the time value of
money? - correct-answer -The future value of $1 at the end of two years is equal
to $1 plus the first year's interest times 1 plus the annual interest rate.
FINA 3315 UTA Exam 1 -Complete
Practice Questions And Answers
When using the constant growth dividend valuation model, which of the following
will lower the value of the stock? - correct-answer -an increase in the required
rate of return
If the actual rate of return on an investment portfolio is constant from year to
year, the standard deviation of that portfolio is zero. - correct-answer -True
Betas for actively traded stocks. are readily available from online sources. -
correct-answer -True
For which one of the following situations will the dividend growth models work
especially well? - correct-answer -mature firm with a policy of increasing its
earnings and dividends at an average rate of 5% per year
, 2
Both the holding period to qualify and the tax rate on long term capital gains -
correct-answer -are subject to political pressure and occasionally change.
The stock of Plomb Co. falls sharply on news that its CEO has drowned in a boating
accident while on vacation. This is an example of - correct-answer -event risk
The returns on the stock of DEF and GHI companies over a 4 year period are
shown below:
Year DEF GHI
1 8% 11%
2 12% 9%
3 −5%− 9%
4 6% 13%
From this limited data you should conclude that returns on - correct-answer -DEF
and GHI are somewhat positively correlated.
Which one of the following statements is correct concerning the time value of
money? - correct-answer -The future value of $1 at the end of two years is equal
to $1 plus the first year's interest times 1 plus the annual interest rate.
